“Meandering Below the ATH” was this month’s theme. Here is the report, followed by some thoughts on the Wikifolio’s capital limits:
Asset Performances 10/26 (September 30–October 30, according to Wikifolio, 7:00 p.m.)
3xQQQ: -18%
2xWTI: +38%
1xBTC: -6.5%
3xGTAA Portfolio (Oct. 30, according to Getquin)
September 30, 2026: €144,900
October 30, 2026: €150,100
Wikifolio Certificate (Oct. 30, mid-market rate, according to Wikifolio)
September 30, 2026: €225.35
October 30, 2026: €233.25
Month: +3.6%
YTD: +43.7%
October 2026 Review
Thanks to the oil rally, 3xGTAA posted moderate gains in October as well, despite losses in the Nasdaq 100 and Bitcoin. Since the asset classes are now moving in opposite directions again, 3xGTAA has been fluctuating just below its all-time high (ATH) throughout October and briefly surpassed it on Oct. 28 for just one day. Typically, such relatively calm periods are very soon followed by more volatile ones. The direction is unclear.
Outlook 11/26
It comes as no surprise that 3xGTAA remains invested in 2xWTI; its momentum remains exceptionally strong. However, at over 43%, its weighting in the portfolio is significantly above the equilibrium level of 33%. Therefore, the portfolio will be rebalanced, and profits will be realized at the same time. BTC has also lost momentum in recent weeks but continues to trend positively in the medium term. We’ll increase our position here during Monday’s rebalancing. Furthermore, all other asset classes have now fallen below the signal line—TLT and GLD for some time, while QQQ and EU50 have done so only in the last few days. With 3xQQQ, the signal is clear, which is why I already sold into the falling market today.
The allocation for November will therefore be as follows: 2xWTI, 1xBTC, CASH. This breakdown can likely be seen as a reflection of current market uncertainties: disappointments in the stock market, escalation in the oil market, and volatility in interest rates. But 3xGTAA follows momentum, not forecasts.
Report from the 3xGTAA Workshop
For this month, I’ve saved a topic that I’ve brought up repeatedly in the forum over the past few weeks, for example, regarding our @DonkeyInvestor : the capital limits of the 3xGTAA Wikifolio. Generally speaking, the question is: up to what capital amount does a leveraged ETF-based, monthly trading model actually work? Specifically, this question arose due to trading issues with the 3x ETFs in the Wikifolio portfolio.
What were these problems? On several occasions in the past on Wikifolio, I was unable to successfully execute a buy or sell order (e.g., the 3xUSDEUR from WisdomTree). The following three scenarios occurred alternately: 1) With market orders, the spread remained at approximately 5% for hours—roughly 10 to 30 times the expected, normal level. 2) With limit orders, the execution time took several hours, during which the security’s price fluctuated by several percentage points. Unless I kept lowering the order price, I wouldn’t have been able to sell anything at all. 3) Sometimes, no ask price was displayed at all. This is very frustrating when, according to the model, it should actually be time to sell.
How do I explain these problems? Basically, I think the orders are too large for the market maker to execute them effectively. Or there is simply no bid on the other side in the desired size with which to trade. This is particularly evident in the example of the WisdomTree Short EUR Long USD 3x Daily $SEU3 (+0,03%) . This ETF currently has a market capitalization of €1,080,000. The Wikifolio now has just under €3 million in net assets/AUM (assets under management). If one-third of the Wikifolio is to be allocated to this ETF, the Wikifolio simply places a buy order for the entire available supply of the ETF. The same applies in reverse when selling. It’s hardly surprising that this leads to problems. Following the simplification of 3xGTAA, this ETF—along with USDEUR—is no longer part of the Wikifolio pool. However, since leveraged ETFs are, in some cases, specialized niche products, their market capitalization isn’t very high, meaning that as Wikifolio volume increases, these trading issues could—and likely will—affect other ETFs as well. The 3xGTAA Wikifolio would then become a victim of its own success.
To give you an idea of the actual values and allow you to assess the limits of the Wikifolio for yourselves, here is an overview of the market capitalization (net assets/AUM) of the ETFs traded in 3xGTAA:
XEON: 23,000 million €
1xBTC: 1,400 million €
3xQQQ: 605 million €
3xGLD: 212 million €
2xWTI: 57 million €
3xEU50: €33 million
3xIEF: €9 million
The further down the list a security is, the more difficult it is to execute an order immediately at the market price or even to find a time when the spreads are acceptable. In this list, I’ve only encountered minor difficulties with 3xEU50 and 2xWTI—mostly involving high spreads and limit order execution times of about 15 minutes. That’s still manageable. But now imagine that the Wikifolio continues to perform well and attracts even more investors, so that, for example, it holds €10 million in assets in two years. Then, rebalancing one-third of the portfolio would mean an order of more than €3 million. For an ETF with AUM of 33 million, that’s a problem. Keep in mind that with the frequent rebalancing in 3xGTAA, every percentage point counts. 12 times 1% is already nearly double the expected long-term performance of an ACWI.
So what should be done? There is no immediate need for action. As long as the investor capital in the 3xGTAA Wikifolio does not reach the double-digit million range, the problems should be easily solvable (limit orders, optimized trading times, partial orders, etc.). Beyond that, other solutions are needed, though they may only become feasible at that point. For example, I—as likely a VIP client by then—could try to have WisdomTree increase the AUM of the ETFs or have Solactive issue a special 3xGTAA certificate. Or, if none of that works, a solution tailored specifically to our “donkey” would be interesting: I could try to coax the investors out of the Wikifolio certificate. A little psychotic communication here, a few untested changes to the model there—and presto, I’m back on my own in my 3xGTAA Wikifolio and free of trading issues. You’ll see which option I end up choosing.
Until then, may the momentum be with you!
Yours, Epi
